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November 14, 2010

A further defense of Fair Trade, by Mary Beth Danielson

Why can't we all just get along? Mary Beth Danielson's post about MayaWorks, fair trade and "compassion fatigue" brought 40 comments, some of them angry, in just two days. Here's her response.

By Mary Beth Danielson

For RacinePost

I am amazed at the dialogue my writing started. Go ahead, sling verbiage; churn through the topic at hand. This conversation about the morality of our shopping choices is a conversation this country desperately needs.

Here are more thing to consider.

Free trade and Fair Trade are not the same thing.

Free trade is when governments make agreements to trade with each other without imposing too many tariffs. Consider the ramifications of CAFTA (Central American Free Trade Agreement). If a company can make gizmos more cheaply in Guatemala than they can in the US and then import them for no or very low tariffs, it “makes more sense” to close the North American factory where workers were earning $14/hr, move the whole shebang to Guatemala City where people work for $1.25/hr.

What happens when that occurs? Well, at first there’s more cash for the Guatemalan worker - but not enough to afford a decent life.

Children have enough to eat,

go to school, have a real childhood

when their mothers work.

Families leave the rural areas where they were desperately poor and malnourished, but they had the support systems of relatives, friends, maybe some land on which to grow a little food. Now they have to live by cash, they can’t afford housing, childcare, or enough to eat. So they live in flimsy slums where life is a misery.

Meanwhile the U.S. worker is laid off. He or she will probably eventually get another job but in today’s economy, it will probably pay less. Now the North American worker’s strategy for survival is to buy cheaper things at cheaper places; i.e., the cheaper gizmos from Guatemala.

What just happened here? Who got richer? Somebody out there is now raking in $12/hr profit on each hour the Guatemalan works.

There’s a phrase for this. “The rich get richer.”

Fair Trade is a global movement to bring dialogue, transparency and respect to international trading.

The person who makes the product should earn a livable wage.

Kids don’t do the work.

The environment is considered and protected in work processes.

You can learn a lot and see fabulous products from around the world at Fair Trade Federation.org. According to their fact sheet, Fair Trade amounts to about $4.5 billion a year in international trade.

Few of us can afford the effort or cash it would take to research every shopping choice we make. But all of us can understand this. When we buy a Fair Trade item – somewhere in the world a worker has more work to do tomorrow to replace the item we bought today. If that work pays a living wage and is done in decent circumstances, we have helped to make the world better for someone else.

We love to talk about our values. For most of us, the most frequent moral choices we make are where we will spend our money. Fair Trade shopping is one option to put our money where are values are.

I’m stumped to understand why attempting to make the world a little better for hard-pressed people in very poor nations seems so aggravating to some.

(And for those who think this is a money-making opportunity for me – I and the others in town who host these sales all do so as volunteers. I have a full-time job, this is extra. So is the writing for it.)

Fair Trade laws have been around since the 1880's and thought to protect the small retailer from predatory competition. It only allowed inefficient business men to stay in business. They have returned may times since their first conception. They are back again, but they will go away again. Let the free market place take care of world wide prices for goods.

Thank you, Mary Beth, for a reasoned response to a rather shocking amount of vitriol. To say I am perplexed and unpleasantly surprised at the written responses is an understatement. Whether or not I agree with statements, I do applaud those who do not hide under anonymityBTW: I saw Kathryn and Mary at yesterday's sale and was happy to find the aprons I wanted to buy! We also bought from other local self-employed people at the sale. And for the naysayers,my son and I then went shopping on Main St., where between us we spent a bit of money.

Since when is the outsourcing of jobs not news? Some may think that fair trade is designed to protect inefficient businesses, and those would be the people who measure successful business by profit margins alone.

If your employees cannot afford to live, if you pollute the land and game the system all to maximize profits, there are other words to describe that and it isn't "successful".

Fair trade models are also found in the U.S., not all products are found from developing countries. The choices we make in how we spend our money is just as important as the choices we make in what we eat.

Thanks Mary Beth for this follow up. Just to be clear, I am not the least bit aggravated by your attempts to make life better for "hard pressed people in very poor nations." In fact, I applaud what you are doing.

Where I take exception is in your political views as I see them and I have already made my points there so I won't repeat them. But I will weigh in on "fair trade" and shopping morals. So as not to make this personal, I will speak generally on the topic and not about you or Maya Works.

For starters, we should recognize the futility of achieving a utopian world where everything is fair. Just look around your home. We have hundreds of things from computers, televisions, flooring, paint, light fixtures etc... etc.... These hundreds of things come from all over the world with ingredients mined and or created from all over the world. Does anyone really think it is possible to ensure that everyone who was involved with the making of tire, for example, has been treated fairly? And who is the perfect individual who decides what is fair?

Some may believe that an organization can put there stamp of approval on a product such that we can be sure that everyone has been given a fair shake. But how do we know this. Who is ensuring that a fair trade group is being fair?

The conceit is that a fair trader is somehow more virtuous than a free trader. I am not buying that assumption. Keep in mind that some people are willing to pay more for the same item if it soothes their conscience or otherwise makes them feel better. This of course presents an opportunity to skimp on the fairness part while ramping up the prices.

It is better in my view to focus on free trade which, in my view is fair trade. The great virtue with trade is that both parties to a trade are better off or they wouldn't make the trade, under most circumstances.

I am sure I will have more to say on the topic after being on the receiving end of personal attacks from the anonymous "fairness" advocates. Anyone else see the irony in there behavior?

Thanks, Denis. There is something to be said for the economic doctrine of comparable advantage. We actually could be doing lots better here, for example, with more R&D to place ourselves in a better, more commanding position on the playing field in the world, as President Obama (and Clinton before him) advocate.

The globalization of the economy is not new. Indeed, it flourished before World War I. Unfortunately, international distrust, war, trade barriers thrown up before and during the Great Depression and unequal "me, first" national policies led to a not-very-nice 20th Century, in the main.

Let's not make the same mistakes in the 21st century. Nations and societies will go through their own development stages, just as our country did. It's messy sometimes, but the curve of history bends toward justice, so long as our own too-defensive instincts don't bend it out of shape.

My ancestors scraped by in coal-mining towns, the outgrowth of our industrial revolution. Yes, it was hellish. In more recent times, they endured major economic and cultural shocks, a Great Depression, two world wars ... a nation's economic history is punctuated by incredible unfairness and sacrifice, even unmeasured amounts of suffering.

But we came through, stronger, better, with an economy and social system that, in the main, works for most, if not all.

1) We need to keep it that way (though maintaining the curve toward justice);

2) We need to allow other nations to achieve it as well, as bumpy as that road may be.

i think this dialogue is very important and yes, newsworthy. i have personally visited mayaworks artisans in guatemala and have seen the positive impacts on their lives working for an organization such as mayaworks.

this information is educational and necessary for everyone one to grasp --

Hat's a Panama from - you guessed it - Panama. They make the best ones there and have for many decades. That's what comparative advantage means. They make the best hats, I want the best hat, I buy their hats. I get a superior product. They get to do what they do best. (And I'm sure they do many things well in Panama, just like we do many things well here.) That's free trade.

But, say, the government decides I should buy an America hat and throws up a tariff to protect U.S. "panama" hat makers? I can still buy a Panama hat, but it'll artificially cost more. U.S. "panama" hats also will cost more because the whole idea of the tariff is to close out competition. That's unfair trade, and costly to both societies as well.

Randy - for once we agree. With your socialistic views - this view is a bit inconsistant with your socialism position. You think the government should control everything. I guess when it's to your benefit, then it's ok to drift.

... but I also wear fur-felt Stetson hats in the winter time. They used to be made in Philadelphia, but now in St. Louis, I think. The best fur-felt hats are made in the U.S.A., so that's what I buy. That's another example of comparative advantage.

[Quote: "But all of us can understand this. When we buy a Fair Trade item – somewhere in the world a worker has more work to do tomorrow to replace the item we bought today."] ...............well when you buy an American Product in America youknow that somewhere in America a worker has a job and is able to work and afford to support his family.

Except that when you buy a product in America, alot of times it means it was produced by an over-paid union worker, which is a grossly unfair situation, if you ask me.

I'm new to this conversation, but in my opninion, overall, why bother caring about Fair Trade? Everything we buy from Wal-Mart and Target and Menards, etc., etc., etc., etc. is mostly made with unfair, underpaid child slave labor in China, etc. And I'm supposed to worry about a few gifts made by women in Guatamala?

There is no way to live a life in America buying the things you NEED within totally moral parameters. Add into it all the businesses that give money to Planned Parenthood (the list of which is hundreds long and populated by the biggest and most prominent retailers out there) and it's an attrocity.

So I ignore all of it - whoever has the lowest price for what I need wins. Period. If you're a coffee whore or consitently buy something in large quantities, then by all means yes, try to get it fair trade. But otherwise, it's a great idea that barely makes a ripple.

I support anyone who wants to do this, but I agree with Dennis (who I don't know from Adam) - free trade is best.

Was reading the other day a story on the Honduran economy, where U.S. company "sweat shops" have come under fire in recent years. It was pointed out by one Honduran official, however, that those "sweat shop" jobs actually pay people FOUR TIMES the median income in Honduras. A bad thing? It would be better if it were better, and ultimately, it will be better as time goes on and the 39 percent unemployment (and underemployment) rate in Honduras gets cut down. But we probably need to recognize that what we see as sweat shops (and saw in our own country for several decades) may appear to actual people on the ground as better opportunities than subsistence farming or picking fruit .... or doing nothing at all.